It was not to be Barrichello's day. The Brazilian was able to enjoy only 300 meters of his lead from the pole position, when R. Schumacher's Williams failed to brake on time and took off after hitting the back of the Ferrari. Barrichello was hit on the head by debris coming from R. Schumacher's airborne car and both retired. R. Schumacher claimed that Barrichello had been swerving all over the place, changing direction three times (while the leading car is only allowed to change direction once at the start), while the Brazilian claimed that he was just defending his position and that the German had been too aggressive and had waited far too late to brake. The accident at the front had its repercussions down the field and initiated a number of shunts that caused eight drivers in total to retire at the start of the GP. These were Felipe Massa (Sauber), Nick Heidfeld (Sauber), Fisichella (Renault), Button (Renault), Panis (Bar-Honda), McNish (Toyota) and, of course, Barrichello and R. Schumacher. Amazingly the race organizers decided not to stop the GP and restart it, rather, they sent out the safety car and proceeded to remove all the cars that had become stranded over all the place. This decision caused much anger amongst those who had been taken out and were hoping to be allowed to restart on a spare car. On top of the eight retired drivers, the two Arrows had both stalled on the starting grid before the formation lap. Frentzen joined the race from the pits on lap ten, but failed to see that the red lights were on in the pit lanes and was later black-flagged. His team mate Bernoldi was disqualified too for having joined the race (at the same time as Frentzen on lap 10) with the spare car. While changing to the spare car is allowed in case of a race restart, the Australian GP was never stopped.

After all the commotion at the start Coulthard found himself in the lead in front of Trulli, M. Schumacher (in last season's car because of reliability issues with the new F2002) and Montoya. Trulli defended his position well despite M. Schumacher's attempts at going past, until lap nine, when something seemingly broke in the Renault, which went out of control and span stopping on the track. The Ferrari and the Williams drivers managed to avoid a collision with Trulli, but the safety car was out once again, allowing M. Schumacher and Montoya to catch up with Coulthard, who had built up a sizeable gap thanks to Trulli. As soon as the Renault had been cleared from the track and the safety car went back in, Coulthard in the lead lost control of his McLaren and went for an unscheduled trip on the grass, letting M. Schumacher and Montoya through. Coulthard suffered from a few more trips out of the track, pointing to traction problems, until his car finally got stuck in sixth gear and the Scot had to park it to the side, causing a yellow flag situation. With Coulthard out of the way M. Schumacher was in the lead, but not for long as Montoya, who had been running wide and taking risks all the way, took advantage of an opening and went past the German into the lead. The reigning Drivers World Champion was not prepared to give up the fight and became an ever-present feature in Montoya's rear-view mirrors. All came together for the German on lap 17, when the Colombian went wide again and last year's Ferrari F2001 stormed past him and sped away, building up a good gap in the space of a few laps. Having take the lead, M. Schumacher kept it to the very end ahead of Montoya, who had to settle for second.

Kimi Räikkönen, who had had to go for an early unscheduled pit stop for a new nosecone and to have some debris cleared from the cockpit following the start pile-up, had moved all the way into third place, having gone past troubled team mate Coulthard. The young Finn proved to have deserved his drive when he clocked the fastest lap time of the race, before going on to finish on the podium, albeit the lowest step, for the first time in his life.

The race finished on lap 17 when M. Schumacher went into the lead, as that pretty much put an end to the heart-stopping fights for position. The only other events of note of the Australian GP were Villeneuve's retirement and Salo's performance. Villeneuve was sailing in seventh place when his rear wing became detached on lap 32, sending the Canadian spinning into the tyre barrier and out of the race. Salo brought delight on Toyota's debut by taking home a point. For a while it looked as if he could even go past Webber and finish fifth, but a trip on the grass with only two laps to go almost put an end to his points hopes. He managed to keep the engine running and settled with being able to finish in the points, a great result for new team Toyota nonetheless. Australian Mark Webber sent the local crowd crazy when he finished fifth. He and fellow Australian team owner Paul Stoddart stepped on the podium with an Australian flag after the official ceremony for the benefit of the public. Eddie Irvine avenged Jaguar's bad performance in practice and qualifying by finishing in fourth place, pretty much unchallenged, his own best result for quite a while.

The Australian GP marked the start of the 2002 season, which will continue in Malaysia on 17 March.